The Institute of Chartered Accountants of India (ICAI) has recently announced the introduction of a new syllabus for the CA Intermediate program, which will come into effect on July 1, 2023. The first examination based on this revised syllabus is scheduled to take place in May 2024. However, it is important to note that the final CA Intermediate test under the current curriculum will still be conducted in November 2023, utilizing the existing syllabus. Aspiring Chartered Accountants should make it a priority to stay updated with the latest developments in order to excel in their studies. To gain a comprehensive understanding of the CA Intermediate new curriculum introduced by the ICAI, it is recommended to read the entire article, which provides detailed information about the various papers and topics covered under the new scheme.

CA Intermediate New Syllabus Papers May 2024 Exam

Paper Name	Marks
1. Advanced Accounting	100 Marks
2. Corporate And Other Laws   Part I: Company Law And Limited Liability Partnership Law   Part Ii: Other Laws	100 Marks   Part I: 70 Marks   Part II: 30 Marks
3. Taxation   Section A: Income Tax Law   Section B: Goods and Services Tax	100 Marks   Section A: 50 Marks   Section B: 50 Marks
4. Cost and Management Accounting	100 Marks
5. Auditing and Ethics	100 Marks
6. Financial Management AndStrategic Management   Section A: Financial ManagementSection   B: Strategic Management	100 Marks   50 Marks   50 Marks

Detailed CA Intermediate New Scheme Syllabus

The CA Intermediate course's new syllabus, as outlined in the latest ICAI plan, encompasses six subjects. A comprehensive description of each subject is provided below.

PAPER 1 : ADVANCED ACCOUNTING (100 MARKS)

Objective

In order to gain the proficiency in applying distinct accounting standards and regulations to diverse transactions and occurrences, as well as in the preparation and presentation of financial statements for various business entities, one must strive to acquire the necessary skills and knowledge.

Contents

1. Process of formulation of Accounting Standards including Indian Accounting Standards (IFRS converged standards) and IFRSs; Convergence vs Adoption; Objective and Concepts of carve outs.

2. Framework for Preparation and Presentation of Financial Statements (as per Accounting Standards).

3. i Applicability of Accounting Standards to various entities.
   ii Application of Accounting Standards:
   AS 1 Disclosure of Accounting Policies
   AS 2 Valuation of Inventories
   AS 3 Cash Flow Statements
   AS 4 Contingencies and Events Occurring After the Balance Sheet Date
   AS 5 Net Profit or Loss for the Period, Prior Period Items and Changes
   in Accounting Policies
   AS 7 Construction Contracts
   AS 9 Revenue Recognition
   AS 10 Property, Plant and Equipment
   AS 11 The Effects of Changes in Foreign Exchange Rates
   AS 12 Accounting for Government Grants
   AS 13 Accounting for Investments
   AS 14 Accounting for Amalgamations (excluding inter-company holdings)
   AS 15 Employee Benefits
   AS 16 Borrowing Costs Leases
   AS 17 Segment Reporting
   AS 18 Related Party Disclosures
   AS 19 Leases
   AS 20 Earnings Per Share
   AS 21 Consolidated Financial Statements of single subsidiaries (excluding problems involving acquisition of Interest in Subsidiary at Different Dates, Cross holding, Disposal of a Subsidiary and Foreign Subsidiaries)
   AS 22 Accounting for Taxes on Income
   AS 23 Accounting for Investment in Associates in Consolidated Financial Statements
   AS 24 Discontinuing Operations
   AS 25 Interim Financial Reporting
   AS 26 Intangible Assets
   AS 27 Financial Reporting of Interests in Joint Ventures
   AS 28 Impairment of Assets
   AS 29 Provisions, Contingent Liabilities and Contingent Assets

4. Company Accounts
   (i) Schedule III to the Companies Act, 2013 (Division I)
   (ii) Preparation of financial statements – Statement of Profit and Loss,
   Balance Sheet and Cash FlowStatement
   (iii) Buy back of securities
   (iv) Accounting for reconstruction of companies

5. Accounting for Branches including foreign branches

PAPER 2: CORPORATE AND OTHER LAWS (100 MARKS)

PART I– COMPANY LAW AND LIMITED LIABILITY PARTNERSHIP LAW (70 MARKS)

Objective

To gain a comprehensive comprehension of the legal regulations and obtain the proficiency to assess and implement the laws in real-life scenarios.

Contents

I. The Companies Act, 2013: including important rules and drafting of notices, resolutions etc.–

1. Preliminary

2. Incorporation of Company and Matters Incidental thereto

3. Prospectus and Allotment of Securities

4. Share Capital and Debentures

5. Acceptance of Deposits by Companies

6. Registration of Charges

7. Management and Administration

8. Declaration and Payment of Dividend

9. Accounts of Companies

10. Audit and Auditors

11. Companies Incorporated Outside India

II. The Limited Liability Partnership Act, 2008 including important Rules

PART II- OTHER LAWS (30 MARKS)

Objective

1. To develop an understanding of the General Clauses Act.
2. To develop an understanding of the rules for interpretation of statutes.
3. To have basic understanding of the Foreign Exchange Management Act, 1999.

Contents

1. The General Clauses Act, 1897: Important Definitions, Extent and Applicability, General Rules of Construction, Powers and Functionaries, Provisions as to Orders, Rules, etc. made under Enactments and Miscellaneous provisions.
2. Interpretation of Statutes: Rules of Interpretation of Statutes, Aids to Interpretation, Rules ofInterpretation/Construction of Deeds and Documents.
3. The Foreign Exchange Management Act, 1999: Significant definitions and concepts of Current andCapital Account Transactions.

Note: If any new legislation(s) is/are enacted in place of the existing legislation(s), the syllabus would includethe corresponding provisions of such new legislation(s) with effect from a date notified by the Institute.

The specific inclusion(s)/exclusion(s) in the various topics covered in the syllabus will be effected every yearby way of Study Guidelines, if required.

PAPER 3: TAXATION (100 MARKS)

SECTION A: INCOME TAX LAW (50 MARKS)

Objective

1. To develop an understanding of the provisions of income-tax law.
2. To acquire the ability to apply such provisions to solve problems and address application orientedissues.

Contents

1. Basic Concepts:
   (i) Income-tax law: An introduction
   (ii) Significant concepts in income-tax law, including person, assessee, previous year, assessmentyear, income, agricultural income
   (iii) Basis of Charge
   (iv) Procedure for computation of total income and tax payable in case of individuals

2. Residential status and scope of total income:
   (i) Residential status
   (ii) Scope of total income

3. Heads of income and the provisions governing computation of income under different heads:
   (i) Salaries
   (ii) Income from house property
   (iii) Profits and gains of business or professionCapital gains
   (iv) Income from other sources

4. Provisions relating to clubbing of income, set-off or carry forward and set-off of losses, deductions fromgross total income.

5. Advance Tax, Tax deduction at source and tax collection at source.

6. Provisions for filing return of income and self-assessment.

7. Computation of total income and income-tax payable by an individual under the alternative taxregimes under the Income-tax Act, 1961 to optimise tax liability.

Note: In the event that new legislation is passed to replace existing legislation, the syllabus will be updated to incorporate the relevant provisions of the new legislation. This update will take effect from the date specified by the Institute. Likewise, if any existing legislation on income tax law becomes obsolete, the syllabus will be revised to exclude such legislation. The effective date of this exclusion will also be notified by the Institute.
Moreover, the Study Guidelines will determine the particular inclusions or exclusions in any subject outlined in the curriculum on an annual basis, if necessary. Additionally, the Annual Finance Act may introduce specific additions or deletions to a topic each year, resulting in further inclusions or exclusions.

SECTION B: GOODS AND SERVICES TAX (GST)(50 MARKS)

Objective

To develop an understanding of the provisions of goods and services tax law.
To acquire the ability to apply such provisions to address/ solve issues in moderately complexscenarios.

Contents

1. GST Laws: An introduction including Constitutional aspects.

2. Levy and collection of CGST and IGST:
   (i) Application of CGST/IGST law
   (ii) Concept of supply including composite and mixed supplies
   (iii) Charge of tax including reverse charge
   (iv) Exemption from tax
   (v) Composition levy

3. Basic concepts of:
   (i) Classification
   (ii) Place of supply
   (iii) Time of supply
   (iv) Value of supply
   (v) Input tax credit

4. Computation of GST liability.

5. Registration.

6. Tax invoice; Credit and Debit Notes; Electronic way bill.

7. Accounts and Records.

8. Returns.

9. Payment of tax.

Note: In the event that a new legislation replaces an existing one, the Institute will update the syllabus to include the relevant provisions of the new legislation. This will take effect from the date specified by the Institute. Conversely, if an existing legislation becomes obsolete, the syllabus will be revised to exclude it, also with effect from the date specified by the Institute. It is important to note that students will not be tested on any specific State GST Law.
The syllabus of this paper covers the Goods and Services Tax laws, and any consequential or corresponding amendments made to these provisions will be included. However, any amendments made to provisions not covered in the syllabus will not be included. The specific topics covered in the syllabus may be subject to inclusion or exclusion every year through Study Guidelines. Additionally, there may be additions or deletions to the syllabus due to the annual Finance Act.

PAPER 4: COST AND MANAGEMENT ACCOUNTING (100 MARKS)

Objective

• To develop an understanding of the basic concepts and applications to establish the cost associated with the production of products and provision of services and apply the same to determine prices.
• To develop an understanding of cost accounting statements.
• To acquire the ability to apply information for cost ascertainment, planning, control and decisionmaking.
• To apply costing methods to determine the costs for different purposes. e To apply appropriate techniques to support short term decisions.

Contents

1. Overview of Cost and Management Accounting:

(i) Introduction to Cost and Management Accounting:
a. Objectives and Scope of Cost and Management Accounting.
b. The users of Cost and Management accounting information, Functions of managementaccounting.
c. Role of cost accounting department in an organisation and its relation with otherdepartments.
d. Installation of Costing System.
e. Relationship of Cost Accounting, Financial Accounting, Management Accounting andFinancial Management.
f. Cost terms and Concepts.
g. Cost Reduction and Cost Control
h. Elements of Costs.
i. Cost behavior pattern, Separating the components of fixed, variable, semi-variable and stepcosts.
j. Methods of Costing, Techniques of Costing. k Digital Costing.

(ii) Elements of Cost and preparation of Cost Sheets:
a. Functional classification and ascertainment of cost.
b. Preparation of Cost Sheets for Manufacturing sector and for Service sector.

2. Ascertainment of Cost and Cost Accounting System:

(i) Material Cost:
a. Introduction to procurement procedures. Valuation of receipts, issue and closing stock of Material, Stock verification.
b. Material requirement analysis through digital costing including Government e-Marketplace (GeM). Introduction to Costing through Enterprise Resource Planning (ERP). Process of tender and quotation.
c. Inventory control: Techniques of fixing level of stocks- minimum, maximum, re-order point, safety stock, determination of optimum stock level. Determination of Optimum Order quantity- Economic Order Quantity (EOQ). Techniques of Inventory control- ABC Analysis, Fast, Slow moving and Non moving (FSN), High, Medium, Low (HML), Vital, Essential, Desirable (VED), Just-in-Time (JIT)- Stock taking and perpetual inventory system, use of inventory control ratios, Digital Inventory control.
d. Treatment of Normal/Abnormal Losses w.r.t. waste, scrap, spoilage, defective, obsolescence.
(ii) Employee Cost:
a. Introduction to Attendance and Payroll procedures.
b. Elements of wages- Basic pay, Dearness Allowance, Overtime, Bonus, Holiday and leavewages, Allowances and perquisites.
c. Employee Cost Control.
d. Employee Turnover- Methods of calculating employee turnover, causes of employee turnover, effects of employee turnover.
e. Remuneration systems and incentive schemes- Premium Bonus Method (Halsey Plan andRowan Plan).
(iii) Direct Expenses: Identification of direct expenses with the main product or service and its treatment.
(iv) Overheads:
a. Functional analysis- Factory, Administration, Selling, Distribution, Research and Development.
b. Behavioral analysis- Fixed, Variable and Semi-Variable.

c. Allocation and Apportionment of overheads using Absorption Costing Method.
d. Factory Overheads- Primary and secondary distribution.
e. Administration Overheads- Method of allocation to cost centres or products.
f. Selling & Distribution Overheads- Analysis and absorption of the expenses in products/ customers, impact of marketing strategies, cost effectiveness of various methods of sales promotion.
g. Treatment of Research and development cost in cost accounting.
(v) Concepts of Activity Based Costing (ABC).
(vi) Integration of cost and financial data:
a. Recording of financial data and its segregation.
b. Introduction to Non-integrated and Integrated Accounting system.
c. Items included in cost accounts only but financial accounts and vice versa.
d. Reconciliation of profit as per Cost and Financial Accounts (under Non-Integrated AccountingSystem).

3. Methods of Costing

(i) Single Output/ Unit Costing.
(ii) Job Costing: Job cost cards and databases, collecting direct costs of each job, attributing overheads to jobs, Application of job costing.
(iii) Batch Costing: Determination of optimum batch quantity, Ascertainment of cost for a batch, Preparation ofbatch cost sheet, Treatment of spoiled and defective work.
(iv) Process/ Operation Costing:
a. Process cost recording, Process loss, Abnormal gains and losses, Equivalent units ofproduction, Inter-process profit, Valuation of work in process.
b. Joint Products-Apportionment of joint costs, Methods of apportioning joint cost over jointproducts.
c. By-Products-Methods of apportioning joint costs over by- products, treatment of By-Productcost.
(v) Costing of Service Sectors: Determination of Costs and Prices of services.

4. Cost Control and Analysis:

(i) Standard Costing:
a. Setting up of Standards, Types of Standards, Standard Costing as method of performancemeasurement.
b. Calculation and Reconciliation of Material Cost, Labour cost, Variable Overhead, FixedOverhead.
(ii) Marginal Costing:
a. Basic concepts of marginal costing, Contribution margin, Break- even analysis, Break–even and profit volume charts, Contribution to sales ratio, Margin of Safety, Angle of Incidence, Cost-Volume- Profit Analysis (CVP).
b. Determination of Cost of a product/ service under marginal costing method, determination of cost of finished goods, work-in- progress.
c. Comparison of Marginal costing with absorption costing method- Reconciliation of profit under both the methods.
d. Short term decision making:
-Make or buy decision
-Discontinuation decision
-Multiproduct break-even analysis
-Limiting factor (key factor)
(iii) Budget and Budgetary Control:
a. Meaning of Budget, Essentials of Budget, Budget Manual, Budget setting process, Preparation of Budget and monitoring procedures.
b. The use of budget in planning and control.
c. Flexible budget, Preparation of Functional budget for operating and non-operating functionsd Cash budget, Master budget.
d. Introduction to Principal/ Key budget factor, Zero Based Budgeting (ZBB), Performancebudget, Control ratios and Budget variances.
e. Budgets and motivation.
f. Feedback and Feed forward controlling in budgeting.

PAPER 5: AUDITING AND ETHICS (100 MARKS)

Objective

1. To develop an understanding of the concepts in auditing and of the generally accepted auditing procedures, techniques and skills and acquire the ability to apply the same in audit and attestation engagements.

2. To understand and apply the concept of ethics while performing audit.

Contents

 

1. Nature, Objective and Scope of Audit:

Auditing Concepts: Origin of Auditing, Meaning of Audit, Need for Audit (Benefits of Audit), Objective of the Audit, Scope of Audit, External Audit engagements, Qualities of Auditor.

– Inherent Limitations of an Audit; Relationship of auditing with other disciplines.

(SA 200 Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance withStandards on Auditing).

2.  Audit Strategy, Audit Planning and Audit Program:

(SA 300 Planning an Audit of Financial statements)

• Auditor’s responsibility to plan an audit of financial statements. Benefits of audit planning.

  • Planning is a continual and iterative process.

  • Discussion of elements of planning with the entity’s management. Involvement of Key Engagement Team Members in planning the audit. Preliminary engagement activities.

  • The auditor’s consideration of client continuance and  ethical requirements. Planning activities.

  • Establishing  an  overall   audit   strategy-   Assistance   for   the   auditor.

Development of audit plan.

• Documenting the overall audit strategy and audit plan; Audit program.

  • Development of Audit Plan and Program.

3. Risk Assessment and Internal Control:

• Audit Risk.

  • Risk of Material Misstatement, Inherent Risk and Control Risk, Detection Risk.

  • Sampling and Non-Sampling Risk.

  • Concept of Materiality, Materiality in Planning and Performing an Audit.

  • Auditor’s responsibility to apply the concept of materiality.

• Auditor’s determination of materiality is a matter of professional judgement. Materiality and AuditRisk.

  • Application  of   materiality   in   planning   and   performing   the   audit.

Concept of Performance materiality.

• Determining materiality and performance materiality when planning the audit.

  • Use of Benchmarks in determining materiality for the financial statements as a whole. Materialitylevel or levels for particular classes of transactions, account balances or disclosures.

  • Revision in materiality as the audit progresses. Documenting the Materiality.

(SA 320 Materiality in Planning and Performing an Audit).

• Identifying and Assessing the Risk of Material Misstatement, Risk Assessment procedures.

  • Understanding the entity and its environment; Internal control.

  • Documenting the Risks.

  • Evaluation of internal control system.

  • Testing of Internal control; Internal Control and IT Environment (SA 315 Identifying and Assessing the Risks of Material Misstatement Through Understanding the Entity and Its Environment).

Digital Audit: Key features, Impact of IT related Risks, Impact on Controls, Internal Financial Controls as per Regulatory requirements, Types of Controls, Audit approach, Understanding and documenting Automated environment, Testing methods, data analytics for audit, assessing and reporting audit findings.

Overview and Introduction: The Auditor’s Responses to Assessed Risks-SA 330.

4.  Audit Evidence:

• Meaning of Audit Evidence.

  • Relevance and Reliability of audit evidence; Sufficient appropriate audit evidence, Meaning ofAssertions.

  • Assertions contained in the Financial Statements. Source of  audit evidence.

  • Test of controls.

  • Substantive Procedures- Test of details and Substantive analytical procedures, Audit procedures forobtaining audit evidence.

  • Evaluation of Audit Evidence (SA 500 Audit Evidence), Audit Trail. (Using the work of Internal Auditors – SA 610)

  • Internal audit function.

• External Auditor’s Responsibility for the audit, Evaluating  the  internal audit function.

  • Basics of Internal Financial Control and  reporting  requirements. Distinction between InternalFinancial Control and Internal Control over Financial Reporting.

  • Audit Sampling: (SA 530 Audit Sampling). Meaning of Audit Sampling.

  • Designing an audit sample; Types of sampling (Approaches to Sampling).

  • Sample Size and selection of items for testing; Sample selection method.

  • Obtaining evidence of existence of inventory; Audit procedure to identify litigation & claims, obtaining evidence regarding the presentation and disclosure of segment information (SA 501 Audit Evidence – Specific Considerations for Selected Items); External confirmation procedures. Management’s refusal to allow the auditor to send a confirmation request; Negative Confirmations(SA 505 External Confirmations); Audit evidence about opening balances; Accounting policies relating  to  opening balances; Reporting with regard to opening balances (SA 510 Initial Audit Engagements-Opening Balances).

  • Meaning of Related Party; Nature of Related Party Relationships & Transactions; Understanding the Entity’s Related Party Relationships & Transactions (SA 550 Related Parties).

  • Analytical  Procedures.

  • Meaning, nature, purpose and timing of  analytical  procedures; Substantive analytical procedures.

  • Designing and performing analytical procedures prior to Audit.

  • Investigating the results of analytical procedures (SA 520 Analytical Procedures).

5. Audit of Items of Financial Statements:

• Audit of sale of Products and Services; Audit of Interest Income, Rental Income, Dividend Income, Netgain/loss on sale of Investments etc.

  • Audit of Purchases, Employee benefits expenses, Depreciation, Interest expense,  Expenditure  on  Power & Fuel, Rent, Repair to building, Repair to Machinery, Insurance, Taxes, Travelling Expenses, Miscellaneous Expenses etc.

  • Audit of Share Capital, Reserve & Surplus, Long Term Borrowings, Trade Payables, Provisions, ShortTerm Borrowings & Other Current Liabilities.

  • Audit of Land, Buildings, Plant & Equipment, Furniture &  Fixtures, Vehicles, Office Equipment, Goodwill, Brand/Trademarks, Computer Software etc.

  • Audit of Loan & Advances, Trade Receivable, Inventories, Cash & Cash Equivalent, Other CurrentAssets. Audit of Contingent Liabilities.

(The list of items is illustrative only)

6. Audit Documentation

• Concept of Audit Documentation.

  • Nature & Purpose of Audit Documentation; Form, Content & Extent of Audit Documentation.Completion Memorandum.

  • Ownership and custody of Audit Documentation (SA 230 Audit Documentation).

7. Completion and Review

• Meaning of Subsequent Events;

  • Auditor’s obligations in different situations of subsequent events.

  • Procedures for subsequent events. (SA 560 Subsequent Events).

  • Responsibilities of the Auditor with regard to Going Concern Assumption; Objectives of the Auditorregarding Going Concern.

  • Events or Conditions that may cast doubt about Going Concern Assumption.

  • Audit Procedures when events or conditions  are  identified  (SA  570 Going Concern). Overview and

  • Introduction of Evaluations of Misstatements identified during the audit (SA 450).

  • Written Representations as Audit Evidence.

  • Objective of Auditor regarding Written Representation.

  • Management from whom Written Representations may be requested.

  • Written Representations about Management’s Responsibilities (SA 580 Written Representations)

  • Overview and Introduction of SA 260: Communication with Those Charged with Governance.

  • Overview and Introduction of SA 265 Communicating Deficiencies in Internal Control to ThoseCharged with Governance and Management.

8. Audit Report

• Forming an opinion on the Financial Statements.

  • Auditor’s Report- basic elements (SA 700 Forming an Opinion and Reporting on FinancialStatements).

  • Communicating key Audit Matters in the Independent  Auditor’s Report (SA 701) Types of Modified Opinion, Circumstances When a Modification to the Auditor’s Opinion is Required, Qualified, Adverse Disclaimer of Opinion (SA 705 Modification to the Opinion in  the  Independent Auditor’s Report).

  • SA 706 Emphasis of Matter Paragraphs and Other Matter Paragraphs  in the Independent Auditor’sReport.

• Nature of Comparative Information.

  • Corresponding Figure; Comparative Financial Statements (SA 710 Comparative Information – Corresponding Figures and Comparative Financial Statements).

  • Branch audit; Joint audit; Reporting requirements under the Companies Act, 2013 including CARO.

9. Special Features of Audit of Different Type of Entities

Appointment of Auditor, Audit Procedure and Audit Report in respect of different Category of Entities: Government; Local bodies; Not-for-profit organizations; Trust and Societies, Partnership Firms, Audit of different type of undertakings, i.e., Educational Institutions, Hotels, Clubs, Hospitals, etc., Basics of Limited Liability Partnerships (LLPs) Audit and Co-operative Societies Audit.

10. Audit of Banks

Understanding of accounting system in Banks, Audit Approach, Audit of Revenue items, SpecialConsideration in Bank Audit with emphasis on Advances and NPAs.

11. Ethics and Terms of Audit Engagements

• Meaning of Ethics.

  • Ethics is a State of Mind, Need for Professional Ethics.

  • Principles based approach v Rules based approach (Ethical or Legal).

  • The fundamental principles of Professional Ethics: Integrity; Objectivity; Professional Competence and Due care; Confidentiality; Professional Behaviour.

  • Independence of Auditors.

  • Threats to Independence: Self Interest threats; Self Review threats; Advocacy threats; Familiaritythreats; Intimidation threats.

  • Safeguards to Independence; Professional Skepticism, Terms of Audit Engagements Preconditionsfor an audit; Audit Engagement.

  • Agreement on Audit Engagement Terms.

  • Terms of Engagement in Recurring Audits (SA 210 Agreeing the Terms of Audit Engagements).

  • Overview and Introduction of SQC 1 Quality Control for Firms  that Perform Audits and Reviews ofHistorical Financial Information and Other Assurance and Related Services Engagements.

  • Overview and Introduction of SA 220 – Quality Control for an Audit of Financial Statements).

Notes

• The specific inclusions/exclusions in any topic covered in the syllabus will be effected by way of Study Guidelines.

• If any new legislations / Standards on Auditing / Guidance Notes / Statements are enacted in place of theexisting legislations / Standards on Auditing / Guidance Notes

/ Statements, the syllabus will accordingly include the corresponding provisions of such new legislations / Standards on Auditing / Guidance Notes / Statements, with effect from the date to be notified by the Institute. The changes in this regard would alsoform part of Study Guidelines.

PAPER 6: FINANCIAL MANAGEMENT ANDSTRATEGIC MANAGEMENT (100 MARKS)

SECTION A : FINANCIAL MANAGEMENT (50 MARKS)

Objective

1. To develop an understanding of various aspects of Financial Management and acquire the ability toapply such knowledge in decision-making.

2. To understand various finance functions like financing decision, investment decision, dividend decision.

3. To develop an understanding of working capital management and its component.

Contents

1. Financial Management and Financial Analysis:

(i) Introduction to Financial Management Function:

1. Objective and scope of financial management.

   1. Profit Maximisation, Wealth  Maximisation  and Value  Creation. c     Role of Financial Manager and Financial Controller.

2. Financial management environment.

3. Functions of finance executives in an organization. f Financial distress and insolvency.

(ii) Financial Analysis through Ratios:

1. Users of the financial analysis.

   1. Sources of financial data for analysis.

   2. Calculation and Interpretation of ratios. d Limitations of ratio analysis.

2. Financing Decisions and Cost of Capital:

• Sources of Finance:Different Sources of Finance, Characteristics of different types of long-term debt and equityfinance, Method of raising long term finance.Different Sources of short-term Finance.Contemporary sources of funding- P2P lending, Equity funding, Crowd funding, Start-upfunding, etc.Internal fund as a source of finance.

• International sources of finance.

• Other sources of finance- Lease Financing, Sale and lease back, Convertible debt, Venturecapital, Grants etc.

(ii) Cost of Capital:

a      Significance of cost of capital. b   Factors of cost of capital.

c      Measurement of costs of individual components of capital. d Weighted average cost of capital (WACC).

e      Marginal cost of capital.

(iii) Capital Structure Decisions:

a      Significance  of capital structure. b        Determinants of capital structure.

c      Capital structure planning and designing. d        Designing of optimum capital structure.

• Theories of Capital Structure and value  of  the  firm-relevancy and Irrelevancy of capitalstructure.

• EBIT- EPS Analysis, Breakeven- EBIT Analysis. g Under/ Over Capitalisation.

(iv) Leverages:

a    Types of Leverages- Operating, Financial and Combined. b Analysis of leverages.

2. Capital Investment and Dividend Decisions:

• Capital Investment Decisions:

a       Objective of capital investment  decisions. b Methods of Investment appraisal:

• Payback period, Discounted payback period.

  • Accounting Rate of Return (ARR).

  • Net Present Value (NPV) – The meaning of NPV, Strengths and limitations of NPV method, The working capital adjustment in NPV analysis, Capital rationing, Equivalent Annual Costs.

  • Internal Rate of Return (IRR)- Limitations of the IRR method, Multiple IRRs.

  • Modified Internal Rate of Return (MIRR)- Definition and explanation of MIRR, Process for calculating  MIRR, Strengths of the MIRR approach.

  • Profitability Index.

(ii) Dividend Decisions:

• Basics of Dividends.

  • Cash dividend, stock dividend/ bonus  share,  stock-splits,  share buy back.

• Determinants of dividend.

• Relevancy and Irrelevancy of Dividend Policies- Traditional Approach, Walter’s model,Gordon’s model, Modigliani and Miller (MM) Hypothesis.

4.  Management of Working Capital:

1. The management of working capital- Liquidity and Profitability.

   1. The Working  capital  financing  decisions-Primary  and  Secondary Sources of Liquidity.

   2. The Working Capital Cycle (Operating Cycle), Effectiveness of Working Capital based on itsoperating and cash conversion cycles.

   3. Assessment of working capital requirement.

   4. Management of Accounts Receivables (Debtors). f        Factoring and Forfaiting.

2. Credit Management:

   1. Credit granting.

   2. Monitoring  accounts  receivables.

   3. Debt collection.

3. Management of Accounts Payables (Creditors). i Management of Cash, Treasury management.

j       Banking norms of working capital finance.

SECTION B : STRATEGIC MANAGEMENT (50 MARKS)

Objective

To gain a comprehensive comprehension of strategic management principles and methodologies, as well as to acquire the proficiency to effectively implement them in various business scenarios.

Contents

1. Introduction to Strategic Management:

   1. Meaning and Nature of Strategic Management.

   2. Importance and Limitations of Strategic Management.

   3. Strategic Intent – Vision, Mission, Goals and Values.

   4. Strategic Levels in Organizations (Network, Corporate, Business and Functional).

2. Strategic Analysis: External Environment:

• International and Macro Environment: PESTLE Analysis.

  • Defining the industry for analysis (Value Chain, PLC).

  • Porters Five Forces – Industry environment analysis.

  • Understanding customers and markets.

  • Competition in the industry.

3. Strategic Analysis: Internal Environment:

• Understanding  key  stakeholders  (Mendelow’s  Model).

  • Strategic drivers (Industry & markets, Customers, Channels, Product & Services, CompetitiveAdvantage).

  • The role of resources and capabilities.

  • Combining external and internal analysis (SWOT Analysis).

  • Gaining competitive advantage (Michael Porter’s Generic Strategies).

4. Strategic Choices:

• Strategic Choices: Concentric, Conglomerate, Market Development, Product Development, Innovation, Horizontal integration, vertical integration, Turnaround, Divesture, Liquidation.

  • How to Develop Strategic Options:

    • Ansoff’s Matrix

    • ADL Matrix

    • BCG Matrix

    • GE Matrix

5. Strategy Implementation and Evaluation:

• Implementation: Formulation vs. Implementation Matrix, Linkages and Issues.

  • Strategic Change through Digital Transformation.

  • Organisation Structure (hard) and Culture (soft).

  • Strategic Leadership.

  • Strategic Control.

  • Strategic Performance Measures.